Analyst: The Fed's hawkish shift is dangerous for the economy
ChainCatcher news, according to Jinshi reports, the Federal Reserve's tone became more hawkish last week. It expects the inflation rate in 2025 to be higher than previously estimated and has reduced the expected number of rate cuts for next year.
Neil Dutta, an analyst at Renaissance Macro, wrote that in an economic environment that seems to be slowing down, the Federal Reserve may find itself in a difficult position and could revert to a more dovish stance. He doubts that expectations regarding the Trump administration's policies—Powell acknowledged that some Federal Reserve officials have now taken this into account—will lead to changes in next year's forecasts. The Federal Reserve "seems to be taking precautions against potential tariff shocks by slowing the pace of rate cuts." Dutta wrote, "Given that the underlying momentum of the economy appears to have weakened, this approach is quite dangerous."